Google Prediction Markets Case Study
- 1. Prediction Markets @ Case Study 3 Name: Pujita Tipnis UID: <deleted> Google ™
- 2. Reason: Prediction markets work so well Works on collective intelligence of diverse crowd Correctly aggregated crowd’s judgment = Accurate results Use of play money eliminates individual bias and increases liquidity Decentralized market (works better than a centralized one) More accurate than polls, surveys, etc. Method adopted - Motivation to participate - Reputation building Rewards and recognition Financial / non-financial incentives Anonymous platform to express opinions Low barriers to entry Increase knowledge and awareness of issues and risk1 Socialize and build relations Facilitate better corporate decision making
- 3. Reason: Prediction markets work so well @ Google Collective intelligence of crowd Use of Goobles eliminates individual bias Anonymous venue to voice opinion Facilitates reputation building Decentralized market ensures diverse crowd and views Rewards (lottery, gifts, etc.) and recognitions boost participation and morale Non-financial incentives (T-shirts etc.) enhance traders’ performance + + = Google Prediction Markets + Crowd RewardsPlay money Trade + + Express opinion Build reputation Goodies + … contd.
- 4. Reason: Prediction markets work so well @ Google Non-monetary rewards eliminate counter-productive behavior Cut through office politics, pretense and puffery and get right to performance2 Low barriers to entry Intuitive and easy to use Enhances relationship building through knowledge sharing Introduces element of fun at workplace Participate in shaping corporate objective Allows arbitrage to expedite liquidity Helps increase awareness of issues & risks Markets are quarterly – they get more accurate with time
- 5. Conditions leading to successful Prediction Markets • Enable liquidity • Ensure optimism • Encourage bragging3 • Boost participation in shaping corporate objectives • Provide quick research links • Formulate improved corporate objectives • Enhance decision making • Use as forecasting & risk management tool • Measure corporate data flow – Proximity analysis4 • Good reputation system • Anonymous platform • Lottery system as incentive • Use of play money • Decentralized system • Support from management • Breaking cultural barriers • Low barriers to entry • Develop a simple & straightforward platform
- 6. Prediction Markets for Decision Making Shaping corporate objectives Project timeline (internal performance) re-evaluation (e.g., Siemens Austria)5 Sales forecast of specific products (e.g., Hewlett-Packard Corporation)6 Demand forecasting (e.g., Google) Help set IPO price using predicted market capitalization of the company7 (e.g., Google) Study information flow within business to confirm role of micro-geography in corporate information flows8 (e.g., Google) Managing manufacturing capacity (e.g., Intel)9 Generate new business ideas (e.g., General Electric)10 Developing and selecting marketing campaigns (e.g., Starwood)11 “Research has shown that prediction markets will be right more often than any individual expert” - Bo Cowgill Accurate and decisive prediction markets can be used for the following kinds of decision making:
- 7. References 1 The Noisy Channel (Daniel Tunkelang)http://thenoisychannel.com/2010/06/09/why-cant-we-just-use- prediction-markets 2 Augur (official website) http://www.augur.net/ 3 Patrakaar2b (Blog)http://patrakaar2b.blogspot.com/2011/03/do-prediction- markets-work.html 4,5,6,7,8 Prediction Markets: How they work and how well they work (Vincent Jacobs)http://vincentjacobs.com/thesis/Vincent%20Jacobs%20(2009).%20Predictio n%20Markets%20- %20How%20They%20Work%20and%20How%20Well%20They%20Work.pdf 9,10,11 Prediction Markets (Wikipedia)https://en.wikipedia.org/wiki/Prediction_market#cite_note-ga-1
- 8. Images Cover Page Image: http://www.clipartbest.com/cliparts/9i4/o4X/9i4o4XE5T.png Google corner tile: http://www.userlogos.org/files/logos/maximus09/Google.png Graph corner tile: http://cdn.mysitemyway.com/etc-mysitemyway/icons/legacy- previews/icons/matte-white-square-icons-business/124648-matte-white-square-icon- business-charts1-sc1.png Crowd: https://openclipart.org/image/2400px/svg_to_png/215499/users.png Play money: http://i.istockimg.com/file_thumbview_approve/17875803/3/stock-illustration- 17875803-one-dollar-bill-cartoon.jpg Opinion: http://www.okcseminari.rs/pluginfile.php/4900/course/summary/naslovana_01.gif Trade dice: http://www.cliparthut.com/clip-arts/12/royalty-free-stock-photos-pair-of-red-and- green-dice-with-buy-sell--12087.jpg Reputation: http://cdn.xl.thumbs.canstockphoto.com/canstock23439216.jpg Rewards: http://arshinfo.com/images/EmployeeRecognitionRewards.png T-shirt: http://clipartmountain.com/tshirt2.gif Google bullet: http://iconbug.com/data/d5/256/4087b168d40a74aff2a55f8685259ea7.png Right bullet: https://az623841.vo.msecnd.net/public- container/images$8a1957082b1d40df828647a7c91a0203/ok.png
- 9. Thank You !